DC mayor vetoes living-wage bill

posted at 2:41 pm on September 12, 2013 by Ed Morrissey

Washington DC Mayor Vincent Gray faced a tough choice. Should he sign a living-wage bill that would make him the darling of progressives and unions in the nation’s capital, or should he veto it and cling to the opportunities for job creation in DC? The answer may well surprise readers:

District Mayor Vincent C. Gray vetoed legislation Thursday that would force the city’s largest retailers to pay a super-minimum wage to their workers, ending two months of uncertainty over the controversial bill’s fate and setting up a decisive override vote at the D.C. Council as early as Tuesday.

The debate over the bill, the Large Retailer Accountability Act, has polarized local leaders while garnering national attention and putting focus on the low wages many retail chains pay their workers.

Although the council denied it, the LRAA was squarely aimed at Walmart, long a target of both progressives and unions for their low labor compensation. The retailer had planned to open six stores in DC, and have committed funds to three of them already. The LRAA would have raised the minimum wage in DC from $8.25 an hour (a dollar more than the national rate) to $12.50 in combined wages and benefits, a 50% increase and a huge increase for existing large-footprint businesses as well as new ones.

Well, most new businesses, anyway. The LRAA included a big exemption for one particular class of employers:

The bill would require retailers with corporate sales of $1 billion or more and operating District stores of at least 75,000 square feet to pay their employees a “living wage” — no less than $12.50 an hour in combined wages and benefits. The proposal includes an exception for employers who collectively bargain with their employees, and existing employers have four years to come into compliance under the law.

This was the big payoff to the unions, and the slap at Walmart, which resists unionization. Thanks to this codicil, the grocery stores with which Walmart’s new stores would have to compete would not have to incur this increase in labor costs. Either Walmart would have to facilitate unionization in its stores, or jack up prices to cover the labor costs — a rather bald payoff to Big Labor by the council.

Left unexplained, of course, is why (a) a “living-wage” requirement is only imposed on large retailers, (b) union workers don’t deserve a “living wage,” and (c) the council didn’t just raise the minimum wage. Gray made that point in his veto:

In the letter, Gray said the bill was “not a true living-wage bill, because it would raise the minimum wage only for a small fraction of the District’s workforce.” He added the bill is a “job-killer,” citing threats from Wal-Mart and other retailers that they will not locate to the city if the bill becomes law.

“If I were to sign this bill into law, it would do nothing but hinder our ability to create jobs, drive away retailers, and set us back on the path to prosperity for all,” he said.

The council can still override the veto, but that will take nine votes. The LRAA only got eight votes in its passage last month, and the Washington Post notes that no members have publicly declared that their votes could change either way.

Walmart’s Steven Restivo, senior director of communications in the retailer’s Public Affairs & Government Relations office, released a celebratory statement provided to Hot Air and other members of the media:

Mayor Gray has chosen jobs, economic development and common sense over special interests – and that’s good news for D.C. residents.

Now that this discriminatory legislation is behind us, we will move forward on our first stores in our nation’s capital.

We look forward to finishing the work we started in the city almost three years ago: a plan to bring more jobs, shopping options and fresh food choices to Washington, D.C. residents.

They’re betting on a failed override vote. I’d guess that any such bet is expertly hedged until it actually fails, though.

I don’t get why this bill is Constitutional. Isn’t there some limit to how much government can play favorites in the economy? I’m pretty sure it would be illegal to write a bill which says that the law only applies to Walmart. I am not a legal scholar so I don’t what the test are for allowable discrimination.

Left unexplained, of course, is why (a) a “living-wage” requirement is only imposed on large retailers, (b) union workers don’t deserve a “living wage,” and (c) the council didn’t just raise the minimum wage.

(a) large retailers have economies of scale such that they can better afford a wage hike.

(b) there is greater equality of bargaining power in unionized workplaces, and so the justification for imposing a minimum wage is lesser. Put differently, unions can generally adequately protect workers’ interests, so the government does not need to step in.

What I don’t understand is the justification for imposing these higher wages on stores that take up more than 75,000 square feet. If you work in a large store instead of a small store, is the rent on your apartment any higher? Do you have to pay more money for child care if you work in a large store instead of a small store?

I realize that these bills are drafted this way so as to aim particularly at Walmart. But I don’t know what rational basis could be argued in favor of requiring them to pay a higher minimum wage than other stores, other than “We disapprove of Walmart.”

I’m pretty sure it would be illegal to write a bill which says that the law only applies to Walmart. I am not a legal scholar so I don’t what the test are for allowable discrimination.

thuja on September 12, 2013 at 2:51 PM

It’s written as a generally applicable law (something like any company with corporate sales revenue over $X Billion). But then they introduced a minimum square footage requirement to make sure that it only applied to Walmart, exempting liberal allies with small retail locations like Starbucks and Apple stores.

The bill would require retailers with corporate sales of $1 billion or more and operating District stores of at least 75,000 square feet to pay their employees a “living wage” — no less than $12.50 an hour in combined wages and benefits.

Why not build a store 74,999 square feet? In case they get all dicey in measuring just cut off 500 square foot. Easy Peasy. I know, I know, I am pretty certain that the DC council had already approved the initial site plans and all of the Walmart Stores were well over 75,000 SF.

The law would probably fail at the appeals level; it is pretty clearly a Bill of Attainder aimed at Wal-Mart alone by the restrictions, and there can be no serious argument as to public policy purpose when it is aimed at only a tiny segment of the workforce.

But that would take millions in legal fees and another couple of years. Wal-Mart isn’t in the business of cleaning up the legal system, they sell mass quantities of stuff at a profit. It would be easier for them to just stay out of town.

I’d d!ck with them based on their definitions. I’d start with hanging the Walmart and call it one grocery and one clothing. Then maybe the add an “‘s” to one as in Walmart’s (or take it off one, I’m not familiar with their sign.

The last step would be to franchise the stores there knocking the $1B threshold down to where they’d be hard pressed to change the regulation.

Do enough of that and I’d think Walmart would have an argument it’s unconstitutional, if they don’t already have one.

Why don’t we stop operating stores in the District of Columbia? Those ba**ards are always trying to legislate how the rest of are to live. Let those b*st*rds starve. Next, we should cut off their oil and natural gas if they don’t leave our oil industry alone. Then those ba*a*ds can freeze in the dark! I’m sure our senators and representatives wouldn’t mind legislating in Dallas, our new capital.

The original bill passed 8-5. To override the veto woud need 9-4 or better. Both sides were dug in with solid positions, so the odds of over-riding are fairly low. However, this is DC we’re talking about. Greased palms or ‘powdered’ noses have been known to change votes in the past. And they wonder why we’re against DC having statehood?????

How long can it take to override the veto? If I was Walmart I wouldn’t sink another dime until this was settled their way.

Cindy Munford on September 12, 2013 at 3:14 PM

If I were Walmart, I’d walk out now and never look back. You just know the libs will keep floating this idea until it does pass. If WalMart has any stores in DC, it will hit them immediately. I know DC looks like a great area to expand for WalMart, but it would never be able to stop looking over its shoulder.

walmart should run away. no telling what a future council that is less grounded in reality will do. the chances of future councils being more liberal is guaranteed so its not a risk worth taking. they dont want their residences to have access to low priced goods and jobs so let them wallow in their squalor.

You get a living wage from the market forces if you take government out of the picture, no welfare handed out, no food stamps to people who work, and no subsidized housing, all market rate housing. Then a business opens in an area if the economics work, and they open somewhere else if it does not.

If Walmart cannot exist in an area without it’s employees taking food stamps and section 8 housing, or phony living wages, then they will locate and hire people somewhere else. Or people will work there as a second job for extra money.

I am not anti Walmart, but if you have to drive to it, from the city, so what? If you want to live closer to it, then move. And I don’t think you should keep it out because it is not your taste, but neither is there a “right” to shop at Walmart in an expensive city.

There is no reason to throw a lot of money at people to keep them living in an urban area, with government handouts and phony minimum wages – they are propping up a strange poverty. The liberals rush in and micromanage the living wage with free stuff. The city should be for people who can afford it, and those that don’t would find that they have a living wage when they move elsewhere.

And the businesses who can do business in D.C. would charge a lot and pay their help the local going rate. I bet it would be more than minimum wage. And of course, people who lived more cheaply elsewhere, might commute in for the jobs.

How long can it take to override the veto? If I was Walmart I wouldn’t sink another dime until this was settled their way.

Cindy Munford on September 12, 2013 at 3:14 PM

WalMart shouldn’t even consider putting a store there. It’s D.C. it’s only a matter of time until another moron is elected mayor and they’ll have to go through this all over again. They should just walk away now and put the store somewhere else.

I support the Mayor’s veto , but the idea that Walmart would somehow punish us by walking away is ludicrous. They’ve already overrun rural and exurbian America, kudzu-like, and if they are going to deliver the growth shareholders demand, they need us city kids now.

I think I remember that WalMart had stated they would relocate the planned stores to just outside the DC boundaries if this passed… so that DC residents could still shop at WalMart, but the tax money would go to another state and not to DC. Obviously, money talks…

I think I remember that WalMart had stated they would relocate the planned stores to just outside the DC boundaries if this passed… so that DC residents could still shop at WalMart, but the tax money would go to another state and not to DC. Obviously, money talks…

dominigan on September 12, 2013 at 5:08 PM

Oh you mean like they did in Illinois when Chicago did something similar?

Yeah! Who do they think they are providing all those entry level jobs in a Democrat-destroyed economy! Don’t they know their place is to stagnate like every other business? Besides, its not like the poor need jobs or cheaper priced goods… /sarc

A local city had an opportunity to get a Walmart to take the place of a dilapidated strip mall. The greenies and Walmart haters slowed it down with their excuses of carbon footprints and the type of shoppers that a Walmart would attract (who are the racists). Walmart bought the property and now the city is frustrated because there is no building going on. There sits a piece of property owned by Walmart, who is just sitting on it because what the greenies and liberals did. So much for jobs and giving the very people, that democrats say they care about, a place to shop and work. And somewhere in Walmart management they are saying….stuff it, we will build when we are good and ready…sad and pathetic lefties…..

A local city had an opportunity to get a Walmart to take the place of a dilapidated strip mall. The greenies and Walmart haters slowed it down with their excuses of carbon footprints and the type of shoppers that a Walmart would attract (who are the racists). Walmart bought the property and now the city is frustrated because there is no building going on. There sits a piece of property owned by Walmart, who is just sitting on it because what the greenies and liberals did. So much for jobs and giving the very people, that democrats say they care about, a place to shop and work. And somewhere in Walmart management they are saying….stuff it, we will build when we are good and ready…sad and pathetic lefties…..

crosshugger on September 12, 2013 at 7:23 PM

They should donate it with the requirement that it be used for a prison, or a halfway house, or an AIDS treatment center, etc. Anything to drive the NIMBY’s nuts.